Separation of Business and Politics: Where Do You Stand?

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Whether you like it or not, we have a new President and a lot of changes are occurring in the White House and Capitol. That’s nothing new. We’re used to debates raging in Washington, DC.

But what is new is this: Most Americans now think it’s okay for businesses to take positions on political issues, even controversial ones. That’s according to a new opinion survey conducted by the public affairs firm Global Strategy Group. Public support for mixing business with politics is a change from last year, when 56 percent of adults said it’s inappropriate for corporations to take a stand on political issues that have nothing to do with their business.

This shift in public perception means that there are bigger battles brewing between consumers and some of the biggest brands. In fact, many brands and companies are making conscious choices to “pick a side” when it comes to politics and hot-button issues, as opposed to staying neutral so as not to offend a good chunk of their consumer base.

Political lines are being drawn, which raises interesting – and even risky – questions for marketing professionals. Is there any benefit to taking a political stand with your brand? Before I answer that question, let’s take a look at some of the companies who have done just that.

New Balance

The athletic shoe company was one of the first to declare their support for President Trump. Less than 48 hours after Trump was elected, New Balance announced their support for the incumbent president via this tweet:

The brand, which prides itself in housing much of its production in the US, agreed with Trump on his position against the Trans-Pacific Partnership, which lifted tariffs on shoes imported from Vietnam to the US.

While many praised the brand’s support of the new administration, New Balance also faced a tremendous backlash from its announcement. It started a social media trend of people posting videos of themselves destroying their New Balance shoes, even burning them. But how did it affect the bottom line? Well, suffice it to say that it probably didn’t have the desired effect New Balance was hoping for.

A week after the announcement, sales plummeted 25% in New York alone. A far-right political website named New Balance as, “the official shoe of white people,” which caused New Balance to release multiple statements that it didn’t support bigotry. In other words, they essentially laid out the argument that their support of President Trump was business, not personal.

But consumers don’t agree.

Starbucks

On the flip side of the political spectrum, the coffee giant decided to take a stand when the President made an executive order barring immigrants from seven Muslim-majority countries. In response, Starbucks CEO announced his promise to hire 10,000 refugees in his stores over the next five years.

This announcement didn’t sit well with some conservatives, who support the President’s executive order. The hashtag #boycottStarbucks began trending on Twitter and other social media sites as people expressed their disappointment in the brand. A lot of people thought Starbucks should be hiring American-born people and military veterans instead.

However, Starbucks fans were quick to point out that it does have a military employment program in place already, employing thousands of veterans and military spouses, with no plans of stopping. In this case, the protest ended-up inspiring another hashtag: #buyStarbucks, as refugee supporters praised Starbucks’ decision. The hashtag picked up momentum as many celebrities started using it to express their growing concerns.

It’s still early, but it doesn’t look like the social media boycott has affected Starbucks sales negatively. In fact, according to Fortune online, their sales are rising.

Uber vs. Lyft Battle

Two more companies stepped up to make their voices heard on various political issues. Many were outraged when the ever-popular Uber brand turned off their surge pricing during the protests at JFK airport. The protests were in response to the same executive order that temporarily banned immigrants from seven different countries. This was controversial because the New York Taxi Workers Alliance was on strike in support of the protest, as this AFL-CIO affiliate represents many immigrants. Many considered this to be strike-breaking by Uber.

By Sunday morning, the the hashtag #deleteuber was trending and people were posting screenshots of the app being deleted from their phone. Uber went into crisis mode immediately, tweeting that they had not intended to break the strike.

Also on Sunday, Uber’s main competitor, Lyft, announced it would donate $1 million to the American Civil Liberties Union (ACLU). This announcement paired with the Uber boycott seemed to work, at least in the short-term, for Lyft. For the first time ever, Lyft beat Uber in App Store downloads following the incident.

So what is the right answer to mixing politics with business? Well, it depends.

My advice to clients is to steer clear of politics. Even if they’re trying to be “glib,” I don’t think it’s a good idea. At best, you’re going to turn-off half of your customer base because consumers typically don’t separate individuals from business. It can also impact your employees and can hurt your prospects of attracting and retaining the right talent. They may see your political beliefs as a personal attack – even when it isn’t.

However, with that said, my clients are smaller, niche organizations. If you’re a bigger brand like Google, Apple or Amazon, it may behoove you to wade-into hot-button topics. And sometimes, you won’t have a choice. Millennials, who are also often activists, will force your hand. And since businesses want this sought-after demographic, they would be smart to listen.

But above all, remember this: America today is more divided than ever so wading into politics is much different than it was just one or two short years ago. It’s more personal and it’s a lightning rod for backlash. You could quickly find yourself getting caught-up in the social movement, #grabyourwallet, whose sole purpose is to shun a growing list of businesses that supported President Trump.

This is also trickling down to smaller brands and businesses. Consumers who are Trump-adverse are pulling back from supporting businesses or services known to have voted for or otherwise supported him. No matter what you decide about mixing politics with business, proceed with extreme caution.

So what do you think? As consumers, do you like when your favorite brands take a political or ethical stand? Or do you prefer keeping business and politics separate?

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